Our First-Time Visitors

Sunday, October 17, 2010

When Business Remodeling Becomes Necessary For Your Startup

The Longaberger Basket Company Headquarters (Newark, OH)

When I get a lot of inquiries from clients and potential clients regarding a particular subject, we usually spend some time in research mode. This month, the theme has been: business remodeling. Oftentimes, most business owners portray hesitancy when it comes to a remodel. Usually, it's because they think of a business remodel as the "scarlet letter" of doom that a business carries. Some startups even refuse to consider remodeling until it becomes too late.

Truth is, a lot of companies have found success in business remodeling--companies like Monster.com, ReMaxx, eWomen Network, and a few others.

One company that has caught my attention is the Longaberger Company. An entrepreneur who built a sophisticated business model based on a simple idea, Dave Longaberger is one to be studied.

Using some examples from The Longaberger Company, here are some reasons to remodel your startup business:

When The Going Gets Tough! 

We often hear how small businesses are more flexible than bigger businesses when it comes to change. Well, startups are even more flexible than small businesses when it comes to change. Sometimes you as a startup have to remember that you cannot follow the exact rule book of small businesses. Once you're in the startup phase, you are in a test phase. You have to wired for change!

In his startup phase, Longaberger found his company faced with a lot of debt and a little revenue. His startup costs and the economy had drained him.  So he decided to remodel his business via his sales methods. He wanted to tell his company story and he found out that retail employees were not delivering the message. So his idea for direct sales representatives was born. And oh did it make a difference within his business!

2 Ways to Revamp Your Startup Sales Methods:

  1. Change your Distribution. This is a part of the business planning process that you must revisit once you start your revamp. Distribution is the medium with which your products and services are being distributed to your potential clients. For example, an online business owner could decide to include an offline sales distribution method strategy. To phrase it simpler, a restaurant could decide to include a catering aspect to its business, because it wants to reach small business clients. An offline startup business could decide to add an online seminar platform that is designed after its offline seminars--in order to reach a different demographic.
  2. Change Your Sales Process. Ask yourself this: when a potential client contacts you, what happens next? This is the process that you want to revisit. Are you getting a lot of prospects that are not turning into sales? For instance, if you have a 3-Step Process and you have a ridiculously high amount of clients going to the 3rd Step without purchasing, you may want to revamp your step. One thing that helped me in my process a year ago was asking these simple questions, what do you think so far?  OR what's stopping you from signing up right now? You'll never get a straight answer to these questions but you will definitely get clues.  
When Your Customers Give You Non-Verbal Cues

You can sense that it's time for a makeover when your customers give you cues. Dave Longaberger started his basket making business initially to test out the idea. At the time, his father was weaving baskets as a side job and Dave asked whether he could make a few baskets for retail sales. When Dave saw that people were willing to pay $10 per basket (instead of $1.50 that his father was charging) he knew that he was onto something. 

2 Ways to Revamp Your Pricing Model

  1. Review package options. Package pricing is a hidden gem that a lot of startups should take advantage of. It allows you to maintain some control of your time, services and values. It also gives you a great way to analyze who's buying and for what reasons. For instance, if someone keeps choosing a package of a higher value that includes some great essentials, you know then that they buy based on quality. 
  2. Add different pricing options. Nobody wants to be the business who starts with a higher price model and ends up with products on sale every week. So one good way to change your prices (particularly if you're trying to decrease the value) is by adding an introductory  pricing option.  Think of how you can introduce someone to your services in a more affordable and less time consuming way. Add a price tag to that and watch what happens. I mention creating some form of paid-for education in my December 2009 post, Be Creative; 3 Quick Tips To Help You Remodel Your Small Business in 2010. 
When You Want To Make A Difference With Your Startup

Business altruism intrigues me, and businesses whose sole purpose rely on making a difference, inspire me. In fact, this infatuation led me to write my first book, A Different Business; 7 Easy Steps To Starting & Planning A Business Around Your Purpose.  Take Dave Longaberger for example. He decided to create a difference within his community--through business. He began to revitalize the small city within Ohio called Dresden. After adding a Longaberger community center, swimming center, senior citizen's center, a new wing to the high school, a farm, a museum, basket landscaping, etc., the small town attracted tons of tourists per year. 

2 Ways to Include An Altruistic Model Within Your Startup Remodel

  1. Support A Non-profit or Institution whose cause you support dearly. For example, I host an educational one-day institute every year. Every year, I also travel to Washington D.C. for a fundraiser whose purpose is to raise scholarship funds for students in Liberia. Part of the proceeds from my educational institute, goes towards providing 2 entrepreneurial scholarships for students in Liberia. I suggest you find a non-profit whose cause may be indirectly related to your business' cause, and one whose employees or programs are directly associated with the individuals deemed beneficiaries. 
  2. Create An Underlying Mission For Your Profit-Producing Business. Take Hello Rewind for example. The company is a design company that produces laptop sleeves. However, their underlying cause is to help sex-trafficking victims prepare for jobs. As a result, they partner with companies who can send them victims to employ. The best way to go about this is to partner with a company or non-profit whose mission is your underlying mission. A simple google search could lead you in the right direction. 

What steps will you be taking to remodel your startup business for 2010-2011? 

Cheryl Isaac is a business start-up strategist to service businesses going online. She contributes to Forbes here and blogs about Making Business Personal here.  


The sales model revamp really sparks my interest. Thanks for a great post!

Love the package option idea. Just completed my 3 month test phase and just figuring out the pricing part. Thanks for the advice!

Thanks for the comments. Love that you both found a section to take-away for your business!

I'm looking forward to partnering with a social entrepreneur this year. Hopefully we can both find a way to make a difference in business. Thanks for the tips.

Thanks Kim! Wish you and your partner good luck!

Twitter Delicious Facebook Digg Stumbleupon Favorites More